Economic Growth Outlook
The budget underscores a strong commitment to enhancing India's economic infrastructure. A substantial increase of 8.9% in infrastructure spending is planned.
The budget anticipates a robust push toward "Viskit Bharat," alongside focused efforts on improving the credit systems for small businesses and individual taxpayers. The government's investment strategy seems to support a growth-oriented framework, with various initiatives designed to improve long-term innovation capabilities, albeit with limited immediate relief for startups. There is an expectation that this budget will stimulate economic development, particularly in the commercial vehicle sector. The pace of fiscal consolidation is moderate for the fiscal year 2027, indicating a phased approach to achieving fiscal goals.
Sector-Specific Allocations
Several sectors received considerable attention in the Budget 2026. The Department of Space will receive a significant allocation of ₹13,705 crore. The education sector's budget has been increased by over 8% to ₹1.39 lakh crore for the fiscal year 2026-27. The semiconductor mission 2.0 has been allocated ₹40,000 crore, and the development of 7 Mega Textile Parks (PM MITRA) signals a bold move for the industry. The Central Bureau of Investigation (CBI) sees a boost of ₹46.5 crore, reaching approximately ₹1105 crore in total. The Union Budget also aims to introduce the Biopharma Shakti initiative to help India become a leading biopharma hub by reducing reliance on imported drugs. The government plans to train 1 lakh allied health professionals over five years, which is a positive development for healthcare.
Innovation and Technology
Technology and innovation are major focal points in the budget. A multilingual AI tool, Bharat Vistar, is proposed, showcasing a drive toward digital inclusion. Specific penalty provisions within the cryptocurrency industry have been introduced as well. Syngenta India welcomes the emphasis on AI-led agriculture, especially the Bharat-VISTAAR initiatives, which are designed to enhance farm-level decision-making and productivity. Furthermore, the formal recognition of the Orange Economy demonstrates India's progressive approach to digital creative exports. Space scientists have celebrated the focus on telescope facilities, signifying a drive towards scientific advancements. The development of AI technologies is viewed as a crucial step for the sector.
Social and Welfare Schemes
The Budget 2026 highlights a commitment to social welfare. The Divyangjan Kaushal Yojana and Divyangjan Sahara Yojana are introduced, backed by a ₹300 crore allocation. This initiative helps over 70 million individuals with disabilities in India. The emphasis on reskilling and education is considered a welcome move, though specific on-ground incentives for technology companies were not provided. Also, there is a focus on strengthening skill development, especially for girls and women. The Union Budget recognizes the importance of mental healthcare, with Ranchi emerging as a proposed hub for mental healthcare, addressing crucial social needs.
Criticism and Concerns
Despite its numerous positives, the budget has received criticism from various quarters. Some critiques include the absence of immediate startup relief, and the lack of measures to specifically address the depreciation of the rupee. The former finance minister Chidambaram believes the budget has a lack of fiscal prudence, as well as a reduction of capital expenditure in some areas. Other leaders are concerned about the exclusion of specific sectors, such as the lack of an outlay for the Chabahar port, and the absence of adequate support for farmers. Several critics noted that the budget has not sufficiently addressed key issues and expressed concerns about potential increases in inflation and unemployment.
